Reconciliation is an activity which ensures that the two sets of accounting record/balances are matching. It is an act of validating recorded balance with source documents.
Why one should do reconciliation?
For individual – Reconciliation will help to discover errors in the transaction and save from fraud activity.
For organizations – Reconciliation is an internal control which helps them to monitor whether each record is up to date and correct or not and provide the corrective action through ‘reconciling items’ details.
Organizations not only do the bank reconciliation but also reconcile other accounts as well.
Bank reconciliation and Reconciliation Statement is a separate and very important activity for every individual and organization.
Please refer Bank Reconciliation to get the detail information like –
i) What is Bank Reconciliation and Statement?
ii) Need and Importance of Bank Reconciliation Statement
iii) Reasons for differences?